Palm-Dialog
BASF wants to ensure that its renewable-based products are made from sustainably sourced raw materials.
Two of our key renewable raw materials are palm oil and palm kernel oil and their respective derivatives, which we mainly use to produce home and personal care ingredients and, to a lesser extent, food ingredients. Oil palm plantations can contribute significantly to deforestation, loss of biodiversity and climate change from the loss of peatland. We share the widespread concern about these challenges and are committed to reducing the impact on the environment.
Our Role
BASF purchases palm oil, palm kernel oil and fractions, as well as primary palm oil and palm kernel oil oleochemical derivatives and edible oil esters, for the production of ingredients for home and personal care products, food ingredients and other industrial applications.
We acknowledge that our use of palm kernel oil and derivatives requires the equivalent of more than 785,000 hectares of land. We would therefore like to help improve the sustainability of the sector.
Our primary concern is to ensure that our products are produced from sustainably sourced palm products. We see it as our responsibility to work intensively with the companies we buy our raw materials from, to engage more closely with the palm supply chain from the smallholder to the end consumer, and to address the consequences of using and selling products based on palm oil and palm kernel oil.
Our Challenge
Palm oil and palm kernel oil are very versatile vegetable oils, and oil palm trees produce higher yields per hectare than any other oil seed. These facts, combined with relatively low production costs when grown on plantations, explain why these vegetable oils are so popular.
The palm oil supply chain is complex, involving challenges linked to environmental protection, human rights, economics in developing countries and international trading.
In the past two to three years, our main focus has been on certified sustainable palm kernel oil. We have used our certified supply chains to increase traceability by sourcing from named crushing plants for palm kernels.
In contrast to certified palm oil, the availability of certified sustainable palm kernel oil and its derivatives is still limited. We at BASF therefore support market transformation via certification. For us certification is key for sustainable palm cultivation. The RSPO certification process is currently the most transparent and effective initiative globally to improve the entire palm oil sector. It provides the necessary infrastructure to monitor the market transformation in a transparent manner. To progress holistically, however, the collaboration of all partners in the value chain is needed.
Our Approach
BASF advocates market transformation towards certified sustainable oil palm products. We actively support the Roundtable on Sustainable Palm Oil (RSPO) and have been working to foster the physical transformation of the industry. BASF stepped up its commitment to certified sustainable oil palm products in the German, Austrian and Swiss markets by joining the Forum for Sustainable Palm Oil in 2017 as a manufacturer of oleo derivatives. As oleoderivative producer we are connected with both ends of the supply chain – upstream with suppliers and downstream to the end consumer. We follow a multi-stakeholder approach: We engage with partners both inside and outside the supply chain to achieve the best possible outcomes for all stakeholders.
By working with our customers and other stakeholders in the Northern Hemisphere and by actively supporting plantations and smallholders in the Southern Hemisphere, we want to contribute to making sustainable oil palm products the norm in the industry. It is our goal to actively support a more rapid transformation of the entire industry.
BASF uses palm products in multiple ways and has numerous splitting and blending steps at many production sites that result in complex palm derivative compositions.
In addition to palm oil and palm kernel oil, we have included palm oil and palm kernel oil fractions as well as primary oleoderivatives from the major oleochemical processes in our time-bound plan. These include, for example, fatty acids and fatty alcohols that are used for home and personal care applications and derivatives used for producing food performance ingredients in our Nutrition & Health business. As a result, we will be able to cover the majority of oleoderivatives. Despite the high complexity of our downstream products, it is our ultimate goal to achieve transparency for all oil palm products.
On our journey towards sustainable oil palm products we have made progress: With the BASF Palm Sourcing Policy we have published a purchasing guideline for palm oil products which includes the protection of forest and peatland. We drive the traceability of our oils to the mill level and support smallholder farmers
The BASF Palm Commitment (2015)
In 2015, we have renewed and extended our BASF Palm Commitment. In 2017, we published our first Palm Progress Report with our progress made in 2016. Our targets are:
1. We have integrated additional forest conservation requirements regarding high carbon stock and peatland into our palm sourcing policy (defined by High Carbon Stock*). Additionally, we have incorporated requirements for a Free, Prior Informed Consent (FPIC) process into our sourcing policy.
2. We will work with key stakeholders and stakeholder forums to define traceability in a way that supports reduction of unsustainable palm oil and thus helps to stop deforestation.
3. We commit ourselves to using raw materials that are both RSPO-certified (MB/SG) and traceable – this applies to palm oil and palm kernel oil, as well as palm fractions and derivatives.
a. In continuation of our commitment made in 2011, BASF’s goal is to source only RSPO-certified sustainable palm oil and palm kernel oil.
b. BASF will establish and incorporate upstream traceability for palm oil and palm kernel oil by 2020.
c. BASF will expand its commitment to only source RSPO-certified sustainable raw materials with upstream traceability for palm oil and palm kernel oil fractions and primary palm and palm kernel oleochemical derivatives** and edible oil esters by 2025.
4. We will support the physical transformation of the market towards sustainable palm oil and palm kernel oil in our supply chain and in the market.
5. We will use our resources to provide forums on the complexities of palm oil for our partners and stakeholders to highlight the need to work together to achieve sustainability.
6. We are targeting smallholder inclusion by supporting appropriate smallholder projects.
7. We will continuously report on our progress based on the defined timetable.
* new plantings shall be done in accordance with the HCSA Toolkit 2.0 or higher versions 1.
** primary derivatives fatty acid methyl esters, fatty alcohols, fatty acids, glycerine and the secondary derivative ascorbyl-palmitate
1 http://highcarbonstock.org/ updated Nov. 2016
Join the Dialog
As the world is consuming more and more palm oil for food, biofuel and personal and home care ingredients, the expansion of palm oil production continues to threaten environmentally sensitive areas of tropical forests and peatlands. With the urgency in sight: how does the cosmetics industry get to sustainable palm?
In 2016, we established the BASF Palm Dialog as a platform to discuss topics relevant for the industry with representatives from the entire supply chain: First in 2016 in Paris, then 2017 in London and 2018 in Amsterdam, we have invited participants from industry, retail, associations and NGOs as well as trade media during the global tradeshow in-cosmetics to discuss solutions and the possible pathways forward.
Certification requirements, transparency on cost impact and public awareness of the supply chain from smallholders to end consumers led the list of major concerns in the audience. The next BASF Palm Dialog is scheduled for April 3rd, 2019, in Paris. The BASF Palm Progress Report 2018 will be published mid of the year.
Follow the dialog on Twitter (@basf_palm-dialog).
